February 2019
By Steven Howard, Head of Mortgage and Lending Intermediaries Compliance Services - The SimplyBiz Group.
Regulation takes many forms in business these days, whether that be GDPR regulation that affects the way in which you are permitted to hold data and communicate your company and product messages, or Financial Conduct Authority regulation, where you are required to meet an extensive set of business principles and submit reports for assessment at regular periods.
As a FIBA Member, my aim to keep you up-to-date with general compliance topics both here and at the various events that you can attend during the year. In addition, you can also have access to an extensive Compliance Hub on our website, which will be a key resource for you to help demonstrate that your firm meets the FCA’s expected standards of monitoring and supervision.
In this month’s issue, I wanted to focus on the act of concealing the transformation of profits from illegal activities and corruption into legitimate assets, or in other words, Money Laundering (the process of cleaning “dirty” money), and how you can protect both yourself and your firm from exposure.
Not only is money laundering a crime in itself, it is also an enabler of wider and much more serious criminal activities with a marked overlap between money laundering and terrorist financing. Serious organised crime activities such as cybercrime, drugs and people trafficking cost the UK economy around £24bn each year, and it is highly likely that much of these proceeds are laundered through UK banks and businesses.
As with all types of criminal activity, money launderers are becoming ever more sophisticated and employ a wide range of techniques in order to clean dirty money and professionals such as accountants, solicitors, estate agents, lenders and brokers are all at risk of being used by money launderers to inadvertently help them to legitimise the proceeds of their crimes.
The FCA has previously announced that it will be taking a harder stance on companies and individuals that are not properly adhering to Anti-Money Laundering (AML) controls. It has also made it clear that as well as exercising its supervisory and civil enforcement powers, it may also consider criminal prosecution if a company or individual that it regulates, has serious AML failings or are repeatedly failing to implement effective AML systems and controls.
So with AML very much in the spotlight, it is essential that firms are able to undertake appropriate identification checks in order to detect any fraudulent applications or documentation that are submitted for your consideration . With this in mind, I thought that it would be appropriate to remind you of a benefit of your FIBA membership - access to the reduced cost SmartSearch verification platform.
SmartSearch is a unique platform, delivering Anti Money Laundering (AML) searches, providing verifications on individuals and businesses across the UK and international markets, including automatic Financial Sanction & Politically Exposed People (PEP) screening.
Powered by Experian and Equifax, SmartSearch enables instant verification of a customer, ensuring compliance with “Know Your Customer’ and AML Customer Due Diligence, giving an instant “Pass” or “Refer” result depending on the risk level presented. SmartSearch also offers a business service that allows you to check details of any firms you work with requiring an AML assessment.
It is my recommendation that the use of a trusted and cost effective electronic ID verification tool will enable you to better protect your business and should you be regulated, this approach can save you time and effort in fulfilling your FCA obligations under the AML rules. Searches are procided at a low cost per unit and for more information please visit the Member Benefits section of the FIBA Members site.